CFAI Mock PM #35

kjames05

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Eagle is reporting the investment under the equity method. Why is the income from the investment not reduced by 20%*Dividend?
 
Income is never reduced by the dividend in the equity method the increase in the investment on the balance sheet is increased by net income-dividends.
 
Income not reduced by div, it’s the investment account on the balace sheet that gets reduced by div.
 
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